What is a proprietary company (Pty Ltd)?
A proprietary company limited by shares, commonly referred to as a Pty Ltd, is the most widely used company structure in Australia. It is a separate legal entity from its owners, meaning it can hold property, enter into contracts, incur debts, and sue or be sued in its own name. The shareholders’ liability is generally limited to the amount unpaid on their shares.
Pty Ltd companies are governed by the Corporations Act 2001 (Cth) and regulated by the Australian Securities and Investments Commission (ASIC). They can have a maximum of 50 non-employee shareholders (shareholders who came in through a crowd-sourced funding offer are not counted) and must not make offers of securities that would need a disclosure document under Chapter 6D, other than offers to existing shareholders or employees and eligible crowd-sourced funding offers. To list, or to raise funds from the public more broadly, a public company (Ltd) is generally required.
To register a Pty Ltd, you need at least one director who ordinarily resides in Australia, at least one shareholder (who can also be the director), a registered office address that is a physical premises (not a PO Box), and a principal place of business. Each director must hold a Director Identification Number (DIN) before their appointment takes effect.
The company must have either a constitution or rely on the replaceable rules set out in the Corporations Act. Most advisers recommend adopting a tailored constitution because it allows you to customise governance arrangements, particularly around share transfers, director powers, and dispute resolution, in ways that the replaceable rules do not.
At CoSec Partners, Pty Ltd registration costs $834 including GST and ASIC fees. Registration is typically completed on the same business day and includes a tailored constitution, all officer and member consents, share certificates, and a complete company register.
Frequently asked questions
How long does it take to register a Pty Ltd company in Australia?
Registration is usually completed on the same business day where the application is lodged during business hours and every director already holds a Director Identification Number. The most common cause of delay is a director without a Director ID, because that application is personal to the individual and cannot be made by your adviser on their behalf.
Can one person be the sole director and sole shareholder of a Pty Ltd?
Yes. A proprietary company can have a single director who is also the only shareholder, provided that person ordinarily resides in Australia. Appointing a company secretary is optional for a proprietary company, and the sole director may also hold that office.
Do I need a constitution, or are the replaceable rules enough?
The replaceable rules are legally sufficient, but they are generic. They cover the basics, such as a director discretion to refuse share transfers, pre-emption on new share issues and a chair’s casting vote, but they say nothing about pre-emption on transfers between shareholders, tailored share class rights, structured deadlock resolution or dispute resolution. Any company that has, or may have, more than one shareholder is generally better served by a tailored constitution.
What is the difference between a Pty Ltd and a public company?
A proprietary company is limited to 50 non-employee shareholders (crowd-sourced funding shareholders are not counted) and must not make offers of securities that would need a Chapter 6D disclosure document, other than offers to existing shareholders or employees and eligible crowd-sourced funding offers. A public company (Ltd) can list and raise funds from the public more broadly, but carries heavier obligations, including at least three directors, a company secretary, and greater reporting and disclosure requirements.
This article is general information only and does not constitute legal, financial, or tax advice. While we endeavour to keep content accurate and current, laws and regulations change frequently. For advice specific to your circumstances, please consult a qualified professional adviser. CoSec Partners Pty Ltd accepts no liability for actions taken based on this content.